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European Union Environmental Policies And Imports Of Agricultural Products From The United States

  • Larson, Bruce A.
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    The EU is the third largest regional export market for US agricultural products, with over $6 billion in annual sales. In principle, EU environmental policies designed to control domestic externalities could alter US agricultural exports to the EU. This paper develops a range of theoretically consistent and empirically relevant sectoral models that can be used to estimate the impact of environmental regulations on EU imports of US agricultural products. Section 2 reviews EU environmental policies to discuss how they may directly and indirectly affect EU demand for US agricultural imports. Section 3 develops models for size cases. Cases 1-3 are developed for homogeneous products. Case 1 assumes prices are fixed and the EU policy is a process regulation imposed on domestic producers. Case 2 extends Case 1 to include equilibrium price adjustments. Case 3 extends Case 2 to the situation where the EU policy is a product standard that affects both EU and US producers, although not necessarily in the same way. Cases 4-6 are developed for differentiated products. Case 4 focuses on EU process regulations with equilibrium price adjustments, and Case 5 extends the model to allow for eco-label policies that might shift EU consumer demands for both domestic and imported items. Case 6 extends Case 5 to allow for product standard policies in markets for differentiated products with eco-labels. Section 4 concludes.

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    File URL: http://purl.umn.edu/19613
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    Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2002 Annual meeting, July 28-31, Long Beach, CA with number 19613.

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    Date of creation: 2002
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    Handle: RePEc:ags:aaea02:19613
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